NORTHEAST NOTEBOOK: Portland, Me.; Waterfront Frustration

By LYN RIDDLE

Published: June 19, 1988

DEVELOPERS here are looking for a way to build on the waterfront following a State Supreme Court decision upholding the right of the city to ban construction retroactively if it is not related to marine activity.

The ruling stemmed from a lawsuit filed by this city last year against Fisherman's Wharf Associates, a subsidiary of the Liberty Corporation, a local developer that built the first condominium complex on the waterfront in 1986. Liberty had proposed a $20 million office-retail complex on Fisherman's Wharf in the heart of the waterfront and near its Chandler's Wharf condominiums.

The city approved the project one week before a May 5, 1987, referendum on banning waterfront development that was not marine-related. Supporters of the referendum had stipulated that the ban would be effective Dec. 22, 1986, the date that papers were filed seeking to put the measure on the ballot.

When the ban passed by a 2-to-1 margin, the city refused to issue a building permit for the project and sought a declaratory judgment in Superior Court on the retroactivity clause. The court ruled in favor of the developer, but the Supreme Court held in April that a state statute allowing the Legislature to make laws retroactive also applied to municipalities.

Liberty plans to press challenges to the legality of the referendum itself. ''We and most of the developers are glad to play by the rules, but first you have to tell us what the rules are and stick to them,'' said Kevin McCarthy, counsel for Liberty.

Karen Sanford, a leader in the Working Waterfront Coalition, which pressed for the ban, said a city had to have a way to protect itself in the period when it was planning a new ordinance.

Last month the city approved a plan for development and expansion of marine-related businesses along the 2.2-mile-long strip of piers, warehouses, fish markets and industrial buildings beside Portland Harbor. For five years new projects are to be marine-related only.

But Roger Hale, president of the waterfront-based General Marine Construction Corporation, said no one would invest in wharfage for commercial boats.

''Everything has stopped,'' Mr. Hale said. He also said pier owners were suffering because they could not rent out second-story space to non-marine-related businesses and could not charge fishermen high rents.

Thomas F. Valleau, the city's director of transportation and waterfront facilities, said that if the waterfront businesses could get through the next few years without serious economic problems, the referendum would ''look like the right thing to have done 15 years from now.''